Press Release: UNCDF Releases Cutting-Edge Research on Financial Health
The United Nations Capital Development Fund (UNCDF) in partnership with i3 Program, supported by MetLife Foundation, today released its flagship publication, “Delivering Financial Health Globally”. The publication exhibits consolidated findings from existing research and extensive consultations with leading experts in the inclusive finance sector. In a time when financial health and well-being represents a prominent area of interest worldwide, specifically to support sustainable and inclusive development, “Delivering Financial Health Globally” explores the constituents and drivers of financial health, how to measure it and the role of public and private sectors in enhancing financial health globally. The publication, more importantly, focuses on measuring financial health impacts on individuals and communities and recommends this approach as a key driver to Sustainable Development Goals (SGDs).
For over a decade, financial inclusion has been a focus of governments, central banks, financial institutions, among others. However, there is sufficient evidence to show that financial inclusion does not necessarily lead to financial health. A study by the U.S.-focused Financial Health Network conducted in 2020 shows that only 33% of Americans are financially healthy despite near-universal financial inclusion. Similarly, while financial inclusion in Kenya increased from 75% to 83% between 2016 and 2019, the percentage of adults deemed financially healthy declined from 39% to 22% in the same period.
Financial health offers a broader approach to create a positive impact among the most vulnerable communities within the global financial ecosystem and ensures the best chance for individuals, communities, and local economies to not only experience sustainable development but also maintain it. “Delivering Financial Health Globally” includes insights on how supporting focusing peoples’ financial health can lead to greater growth outcomes and revenue for the private sector. The report provides a high-level but practical roadmap for the financial providers to become more customer centric.
“With progress in digital financial inclusion in the Least Developed Countries, there comes a new challenge for people and financial service providers: the challenge of supporting people to elevate themselves out of poverty and build a financially resilient life for themselves,” said Preeti Sinha, Executive Secretary, UNCDF. “This is particularly important in the wake of the COVID-19 pandemic, which has reversed many SDG agenda gains. To ensure sustainable impact —particularly in the context of a pandemic that has exposed the financial vulnerability of communities across the globe — a more holistic lens of financial health to create financial preparedness and resilience is nothing short of critical.”
“MetLife Foundation is committed to building financial health for all, and we’re proud to support research that both expands knowledge and builds awareness in this field. We believe this white paper on Delivering Financial Health Globally will set the tone for important conversations and lead to tangible actions and outcomes that will create a more confident future for those in low to moderate income communities,” said Krishna Thacker, Director — Asia Region, MetLife Foundation.
“Delivering Financial Health Globally” is an integral part of UNCDF’s Centre for Financial Health work. The Centre aims to drive discussions, build on evidence among the global community and create shared understanding on the financial health approach – while aiming to build a coalition of public, government, and private sector actors for collective learning and action towards enhancing financial health globally. The launch of the publication will be followed by a series of conversations and consultations with top global experts and leaders to advance the agenda of financial health. The next event will focus on the Middle East and North Africa (MENA) region.
Photo courtesy of Branimir Balogović.